E-magazine Energy & Extractive Industry Mozambique-edition 21- English Version

ASSOCIA

ÇÃO M

OÇAM

BIC

ANA P

ARA O

DESENVOLV

IMENTO

DO S

ECTOR D

A E

NERGIA

& INDÚSTRIA

EXTRACTIV

A

SINCE long the debate about the exploitation of natural re-sources in Mozambique as-sumes an oscillating perspec-tive between hope emergence of a sector that may leverage the Mozambican economy and ends for once and for all the drama of poverty, and another sense, the awareness that the gains from exploration of natu-ral resources will be effective upon a framework where there is the rule of law on all actors involved in the same opera-tion. This debate has accom-panied the development of the sector of natural resource ex-ploitation since the beginning, when the country took the fi rst bold step by signing contracts with major international mining companies.

Probably at this stage, what more mattered was the exis-tence of investors interested in assets in Mozambique rather than necessarily which role they would play in the soci-ety. A critical point! Because the effects have started to ap-pear nowadays, opposing the

WHAT PROSPECTS FOR WHAT PROSPECTS FOR MOZAMBIQUE IN THE LIGHT MOZAMBIQUE IN THE LIGHT OF THE NEW MINING ACT?OF THE NEW MINING ACT?

civil society, government and naturally, the compa-nies involved in the mining business. The bottom line is: Who should be the major winner in this game? A com-plex question with an appar-ently obvious answer. The answer is: Mozambicans! Mozambicans should be the ones that should gain from the exploitation of their natu-ral resources.

In that context, Mozam-bican civil society has been warning about the need for government to take a more daring side before fi rms act-ing in the energy and extrac-tive sector in the country. Dif-

ferent opinions such as ones supporting total renegotiation of the contracts, so far made by the adoption of a law that safeguards above all the inter-ests of both parts, these who take the main stage in this debate. The answer to these concerns seems to have been brought with the idea of the new Mining Act that aims es-sentially an equitable division of the gains from the exploita-tion of natural resources; there must be a greater commitment of companies to issues regard-ing to environmental and social responsibility.

Which perspectives can be drawn in this context of the new mining law? First, is that Mozambique embraces the global dynamic, besides that, it gets in touch with the major-ity of African countries rich in natural resources which are making major reforms in the sector, as is the case in Tanza-nia, Ghana, Namibia, among others. One can also say that the country is adapting to the mechanisms of the EITI, which means it is approaching the fundamental principles of sus-tainable management and ex-ploitation of natural resources. It can also be concluded that this is an offi cial government pledge to the main concerns of the civil society inherent to the exploitation of natural re-sources.

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The Role of Natural The Role of Natural Gas in Mozambique Gas in Mozambique

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Dear Reader!

Welcome back to the new year, but always with a

renewed promise to bring to you the best information re-garding the sector of energy and mining in Mozambique and wish you a happy and prosperous 2013.

In a democratic rule of law, the theory of separation of powers such as legislative, executive and judicial, where the legislature is one of the main instruments, ensures the rights of the citizens, on which good governance demands from governments special re-sponsibility, effi cacy on laws , active citizen participation, openness and coherence.

With the new Mining Act, the expectations is that it will ensure a major concern regarding transparency and wider participation of the dif-ferent actors in which regards to what is paid and what is earned.

This is an opportunity for-public, private and civil society organizations to harmonize the management of natural resources in Mozambique.

Yet on this very fi rst edition of the e-magazine Energy & Extractive Industry Mozam-bique ffor 2013, the reader will be aware of the major contrib-utors to the extractive sector, and other news regarding the risks and growing opportuni-ties in sector.

Happy Reading! Cont. pag. 2

Pag. 5Pag. 5

Nr. 21Nr. 21Nr. 21Newsletter

QUARTERLY

JANUARY, 28th 2 0 1 3 - YEAR I

Bilingue (ENGLISH VERSION)

natural resources may serve the interests of its people. The new mining act will allow that desire to become a reality, but there is, however, a need to draw attention to the scrupulous observance of the new law, as its mere existence is not enough; it reveals itself crucial to familiarize the entire picture surrounding the exploitation of natural resources in the country. Laws do not excel themselves, the govern-ment must be scrupulous and fi rstly doer as nobody is above the law. The general interest must be above particulars inter-ests as it is the only way in which we can safeguard the National Unity principle as well as the State sovereignty. Therefore, it should be noted that the new law should not be considered an end, but a way. (en-ergiamocambique.co.mz)

EMPRESA Nacional de Hidrocarbonetos de Mocambique (ENH) is highly pleased as ENI on block 4 and Anadarko on Block 1 managed to agree in late December on a joint project for liquefaction.

Under the agreement, the two opera-tors will conduct separate, yet coordinat-ed, offshore development activities, while jointly planning and constructing common onshore LNG facilities in the Cabo Delga-do Province of northern Mozambique.

THE CHIEF executive of Italy’s ENI, Paolo Scaroni, travelled to Maputo last Decem-ber to reassure Mozambique president Ar-mando Guebuza and outline the state of play on the company’s plans for block 4 in the Rovuma basin.

2 Newse-MAIL: [email protected] / [email protected]

Website: www.energiamocambique.co.mz Newsletter nr. 21 - JANUARY 28th, 2013

The new Mining Act is undoubtedly fi l-ing some edges inherent to transparency in the exploitation of natural resources. A starting point that returns to Mozambi-cans some hope for future expectations. It is a light at the end of the tunnel, which despite meaning hope, means also some increased challenges both to the govern-ment, companies and a tight vigilance of the civil society as it has now an essential tool to monitor the activities in the sector. The only question remaining is how Mo-zambicans as a whole will respond to the new mining act?

Essentially, everything that a country like Mozambique needs is to ensure that

Contin. of pag. 1 ENH pleased on Anadarko ENH pleased on Anadarko and Eni agreementand Eni agreement

Scaroni reassures Eni Scaroni reassures Eni plans for Rovuma block 4plans for Rovuma block 4

Undtors wiled, offsjointly ponshoredo Prov

Guebuza rejects idea Guebuza rejects idea that mining regions should that mining regions should benefit more from mineralsbenefit more from minerals

Mozambique’s natural resources should benefi t all its citizens and not preferentially benefi t the people living in the mining districts, President Armando Guebuza declared during an address to mark the fi fth anniver-sary of the transfer of ownership of the Hidroelétrica de Cahora Bassa (HCB) company from Portugal to Mozambique.

THE MOZAMBICAN head State used HCB as an example of how the country’s natu-ral resources could serve the whole coun-try. “The distribution of energy from HCB throughout the entire country proves that its location is only a starting point from which to benefi t all Mozambicans. Cahora Bassa should continue to be seen as the mecha-

nism for bringing Mozambicans together, and do its part in the strengthening of the awareness of (our) common destiny.”

Guebuza highlighted that, when Mo-zambique took control of HCB in Novem-ber 2007, electricity from HCB reached only 57 of the country’s 128 districts – but today it reached 109. “What fi ve years ago

was a mirage has been turned into a tan-gible reality in many geographical places of the country.”

Reportedly, some in Mozambique have been arguing that the districts in which mining and hydrocarbon extraction take place should benefi t more from these resources than other districts, so that the blessing of natural resources would not become a curse, as has happened in oth-er African countries. Nevertheless, Gue-buza dismissed this argument as a “tribal thesis”.

EIA expects that falling crude prices will help national average regular gasoline retail prices fall from an average $3.63 per gal-lon in 2012 to annual averages of $3.44 per gallon and $3.34 per gallon in 2013 and 2014, respectively.

There are some seasonal factors for gasoline with prices ris-ing during the summer. This forecast is mostly just some small changes to current prices, and as we all know, there can be wild event driven swings for oil and gasoline prices. (energiamocam-bique.co.mz)

According to the statement, the contract stipulates that the processing unit will have four mod-ules, each capable of processing 5 million tons per year of liquefi ed natural gas and 20 million tons/year, and it will include a possible expansion to 50 million tons of gas per year.

Natural gas to be processed in this unit will rise both in Area 1, op-erated by Anadarko Mozambique Area 1 and Area 4, operated by the Italian petrochemicals group ENI.

Note that the Area 1 block is operated by Anadarko Mozam-bique Area 1, with a share of 36.5%, Mitsui E & P Mozambique Area 1, Ltd. (20%), the Mozambican state Empresa Nacional de Hidrocarbonetos (15%), BPRL Ventures Mozambique BV (10%), Videocon Mozambique Rovuma Ltd. (10%), both in India and the Thailand state group PTT Exploration & Production (8.5%). (Ed-ited by Macauhub)

THE UNIT will be built in the province of Cabo Delgado, 2000 kilometers north of the capital of Mozambique, Maputo, in which the sea oil block located in the Anadarko Mozambique Area 1, a subsidiary of the U.S. group Anadarko Petroleum, works as operator.

2 newse-MAIL: [email protected] / [email protected]


Em comunicado divulgado quarta-feira, a Baobab Re-sources informou ainda que o acordo de parceria, estabele-

pu5nyep

Anadarko commissioned Anadarko commissioned a project for natural gas a project for natural gas processing unit in the country processing unit in the country

EIA Predicts Gasoline Prices to FallEIA Predicts Gasoline Prices to Fall

OIL AND GAS:

A consortium consisting of equal parts by groups Fluor Corp. and JGC Corp. was contracted by Ana-darko Mozambique Area 1 Limited for the drafting of a processing plant for natural gas in Mozambique, Fluor Corporation group said in Irving.

EIA expects that the Brent crude oil spot price, which averaged $112 per barrel in 2012, will fall to an average of $105 per barrel in 2013 and $99 per barrel in 2014. The projected discount of West Texas Intermedi-ate (WTI) crude oil to Brent, which averaged $18 per barrel in 2012, falls to an average of $16 per barrel in 2013 and $8 per barrel in 2014, as planned new pipe-line capacity lowers the cost of moving Mid-continent crude oil to the Gulf Coast refi ning centers.

PUB.

ENERGY FORECAST:

the way former generals have spun in the mining sector. And it provides some an-swers about who pulls the strings in Ma-puto. (Africa Intelligence)

production and shipments as our expan-sion programme continue on schedule, delivering industry-leading returns for our shareholders. Our copper, bauxite, alu-mina, thermal coal and titanium dioxide businesses all delivered substantial pro-duction increases on 2011 levels.”

Iron-ore shipments during the year reached 247-million tons during 2012, despite severe weather disruptions and a signifi cant maintenance shutdown.

Global iron-ore production for the full year reached 253-million tons, which was 4% higher than the 2011 production fi g-ures. (energiamocambique.co.mz)

MORE recently, howev-er, several have moved into the booming min-ing sector to act as go-betweens for big foreign groups. Their local con-nections, whether po-litical or family in nature, make it easier for min-ing companies to win licenses and get around red tape.

The report talks about personalities who have stood out as leading mining industry intermediaries, under the risk that some institutional offi cials may demand excessive payments for their services. A report by Africa Intelligence describes their operations and examines

A detailed report by Africa Intelligence claims that former generals who took part in struggle for independence in Mozambique in the 1970s have long traded in their uniforms for business suits in the booming Mozam-bican mining industry.

Briefs

THE U.S. Chevron is planning to make quite a splash by debuting in the offshore of several North African and West African countries, deliberately leaving East Africa to its American ri-vals Exxon and Anadarko. Its future investments combine with those al-ready made in southern Africa where the group is showing a close interest in shale gas

DURING a visit to Lubumbashi in De-cember, Congo’s oil and gas minister Crispin Atama discreetly raised the idea of an oil pipeline to carry gaso-line to the Democratic Republic of Congo from the port of Beira in Mo-zambique.

ZIMBABWE could well have become the world’s fourth biggest producer of diamonds in volume terms in 2012 staying only behind Botswana, Russia and Canada.

AFRICA: AFRICA: CHEVRON SECURES CHEVRON SECURES FUTURE FUTURE ON THE CONTINENTON THE CONTINENT

CONGO-K/CONGO-K/MOZAMBIQUE: MOZAMBIQUE: A PIPELINE A PIPELINE FOR KATANGA?!FOR KATANGA?!

ZIMBABWE: Harare now in top rank as diamond producer

ZZnndd

Rio Tinto reports record 253 Mt iron-Rio Tinto reports record 253 Mt iron-ore output for 2012ore output for 2012

Mining giant Rio Tinto reported on Tuesday record global iron-ore pro-duction for 2012, as the Pilbara expansion plan continued, while the other portfolios also showed production increases over the previous year.

A detailed report by Africa Intelligence claims that former generals who

Former Generals as intermediaries Former Generals as intermediaries in the mining businessin the mining business



“THIS was another year of strong opera-tional performance across the group,” said CEO Tom Albanese.

“We achieved record annual iron-ore

MINING/IRON ORE:

IN MOZAMBIQUE

This is (and will be) the century of energy and extractive indus-try in Mozambique.

Now, we must question ourselves if these resources are fully at the service of poverty reduction and development (blessing) or will led us to rampant confl icts; stagnant economy (“Dutch dis-ease”); endemic corruption (bribes and bonuses to government offi cials and legislators); or other misfortunate scenarios already observed by all of us (curse).

Eight years are gone since Sasol, a South-African company, began to explore gas in Inhambane through pipelines. So we can say it is already enough time, at least at the scientifi c level, to be able to extrapolate the assessment of the impact of gas explora-tion in Mozambique.

In this way, several questions can be asked to assess potencial impact:

How does gas production affected the country in those 8 years?

Gas revenues from Pande and Temane were or are being used to help relieve poverty? How?

During all this time, did affected populations experienced in-creased access to clean water, good schools and proper health services? And what are the challenges?

Which sectors were not affected by the gas exploration? Spe-cifi cally agriculture sector? And what has been the contribution from the natural gas to the State budget?

Many other issues are topping the list, and these are critical to an assessment of the Sasol gas exploration in Mozambique in recent years. (Redação: Energia-Moçambique)

The Role of Natural Gas in Mozambique DevelopmentThe Role of Natural Gas in Mozambique DevelopmentMozambique is among the poorest countries on the planet, nevertheless,

it is has one of the highest rates of economic growth worldwide in the last two decades - with an annual average of 7.4%.



WHEN it became independent in 1975, the illiteracy rate stood at about 98%; that conditioned the country social and economic perspectives, because education, as said by Jack Delors, is the greatest treasure of people. Despite the war that soon engulfed the country and lasted for 16 years (1976-1992), the country managed various economic and social achievements and fi nally began a process of democracy consolidation.

As an old axiom goes: “the benefi ts of peace are greater than the deeds of war”. The post-confl ict was followed by a period of deep changes with visible refl exes for all, and that is what made Mozambique earn its international prestige.

If the twentieth century has been considered a century of co-lonial liberation, civil war, political pluralism, market economy, consolidation of peace and democracy and decentralization, the twenty-fi rst century may well be marked with the fi ght against poverty, development and above all, the century of the ascension of Mozambique as energy and mining superpower.

The identifi cation of natural gas has been observed back in 1961, but only in 2004 its exploration began in the Inhambane province, more precisely in the districts of Pande and Temane. But what really blasted Mozambique’s position on the internation-al energy ranking, are the recent discoveries in Rovuma Basin – estimated as one of the most signifi cant natural gas reserves identifi ed in the last 10 years, worldwide. Apart from natural gas, Mozambique has large coal reserves with high commercial value such as coking and metallurgical coal; and it also has the largest reserves of titanium in the world amongst other valuable mineral resources.

China to Dominate the 2013 Coal MarketChina to Dominate the 2013 Coal MarketChina is the world’s largest coal producer and con-

sumer and currently accounts for about half of the global coal consumption.

THE U.S. Energy Information Agency noted in its 2012 coun-try analysis brief on China, “Coal supplied the vast majority (70 percent) of China’s total energy consumption of 90 quadrillion British thermal units (Btu) in 2009,” adding, “EIA projects coal’s share of the total energy mix to fall to 59 percent by 2035 due to anticipated higher energy effi ciencies and China’s goal to re-duce its carbon intensity (carbon emissions per unit of GDP). However, absolute coal consumption is expected to double over this period, refl ecting the large growth in total energy consump-tion.”

The World Energy Council reported that China held an es-timated 128 billion short tons of recoverable coal reserves in 2011, the third-largest in the world behind the United States and the Russian Federation, or roughly 13 percent of the world’s total coal reserves. Chinese coal production rose to over 3.8 billion short tons in 2011, making China the largest coal producer in the world.

ENERGY TRENDS & INVESTMENT OPPORTUNITIES:

Currently 27 Chi-nese provinces mine coal, and the country’s coal consumption is ap-proximately three times higher than it was in 2000, with more than half of China’s coal is used for power and heat generation.

Complicating the picture, China, pre-viously a net coal exporter, in 2009 became a net coal importer for the fi rst time over twenty years.

So, as China needs energy imports to fuel its economy, having a coal import contract with Beijing would appear to be a sure bet for Mozambique, or the companies exploring coal in the country of Guebuza. (energiamocambique.co.mz)

Peak Oil and the Future: Peak Oil and the Future: What Can we Expect in 2013?!What Can we Expect in 2013?!

There are many forces at work in our world today such as climate change, the Arab Spring “head winds”, population growth, and mass migrations to name a few. Some of these forces may come to impact our lives in the coming year while others may not be perceptible for de-cades.

SOBRE O PICO DO PETRÓLEO E O FUTURO ENERGÉTICO:

WHEN we talk about energy future, our con-cern here is the world oil and gas supply situ-ation which powers so much of our civilization. The decline in the afford-ability or availability of this resource will bring profound changes to any society, including Mo-zambique. There are nu-merous “trends” or forces active in the world today that have the potential to

interrupt or at least radically change per-ceptions about the future availability of energy supplies.

Most of the problems which could limit the world’s oil supply are well known: tur-moil in the Mideast as it transitions from relative stability to a new and more vola-tile political order; global warming, which is slowly but steadily eating away at the habitability of our planet; and an array of economic problems ranging from too many people to dwindling reserves of natural resources. Several of these prob-lems, however, are relatively obscure and so have not received much publicity in the national media.

The global warming problem with its ever more dire predictions will be with us for a long time. The complexity of weather pat-terns makes prediction of specifi c drought, fl oods, unusual storms, or temperature ex-tremes impossible to predict. What we can say is that the frequency of one or another of these events seems to be increasing and hardly a year goes by now without some very expensive climate aberration hitting some place or another. The costs of these unusual weather related events is already eroding away much of the world’s economy and can only get worse. (Author: Tom Whipple from Oilprice.com)



and Temane in Inhambane province.

FOURTH PLACE. Kenmare Moma Mining, with 135.5 million meticais

The mining company with principal activ-ity of the group on operation of the Moma Mine located on the north east coast of Mozambique.

FIFTH PLACE: Statoil, with 102.5 mil-lion meticais.

The Norwegian oil and gas company has a 65% interest in and the operatorship for blocks 2 and 5 in the Rovuma basin off northern Mozambique.

In summary, hydrocarbon companies accounted for 70 per cent of payments, headed by Anadarko Petroleum Corp. ac-counted for over 40 per cent of all extrac-tive industry payments, followed by mining companies contributions, with Brazilian company Vale on the top. The fi ve largest contributors, Anadarko, Sasol Petroleum, Statoil, Vale and Kenmare accounted for 77 per cent of all payments. (energiamo-cambique.co.mz)

with 266 million meticais.

Considered the company with the larg-est payment declared among mining com-panies, the Brazilian company operate the

vast Moatize coal mine, in Tete province.

THIRD PLACE: Sasol Petroleum Te-mane, with 182.6 million meticais.

Sasol is the South African company that treats and exports natural gas from Pande

The Five Largest Extractive The Five Largest Extractive Industry Contributors Industry Contributors in Mozambiquein Mozambique

After Mozambique disclosure of its third reconciliation report (2010) under the Extractive Industry Transparency Initiative (EITI) - an interna-tional initiative intended to guarantee transparency in payments from the exploitation of natural resources in which companies reveal what they pay and governments, what they receive, and based on Ernst & Young’s consultancy results; we bring to you the ranking of the fi ve larg-est contributors in Mozambique Extractive Industry.

ITIE:

FIRST PLACE: Anadarko Petroleum Corp. with 779.7 million meticais.

Considered the largest 2010 payment in the extractive industry. Just remember

that, the Texas-based company has dis-covered huge natural gas reserves in the Rovuma Basin and it is the operator of Ro-vuma Area 1 in Cabo Delgado.

SECOND PLACE: Vale Mozambique,



Technical Sheet

Address: Av. 25 de Setembro, n° 1123 Prédio CardosoPhone.: +258 21 32 71 16/ 17Fax: +258 21 32 71 17Director: Inguila SeveneEditor: Aunorio SimbineCollaborattors: Nelson Charifo and Alexandre DunduroTranslater: Paulo Pinto Design: Luís Filipe TembeEmail: [email protected]: www.energiamocambique.co.mz www.

status.co.mz

Propriety STATUS-Consultores de Comunicação

DISP. REG. Nº 5 GABINFO/DEC/2008



Mozambique: Triton Advances Mozambique: Triton Advances Graphite ProjectGraphite Project

1882:

The foundation of the Rockefeller The foundation of the Rockefeller Oil EmpireOil Empire

MINING/GRAPHITE:

TRITON has been informed by the Mo-zambique consultants that the granting of the last three (3) exploration licences of the project is expected within the next few weeks.

As previously advised upon the execu-tion of the Joint Venture Agreement with Grafex Ltd, the Company now holds a 49% interest in the project.

Final preparations are underway for a Triton representation to visit the project early next month to review access, local infrastructure and facilities; and to liaise with the local mining service providers in preparation for the commencement of the

A Triton foi informada pelos consultores em Moçambique sobre a con-cessão das últimas três licenças de exploração do projeto de grafi te está prevista para dentro das próximas semanas.

John Davison Rockefeller, the patriarch of the family that dominated the oil market in the U.S. for over a century, was born in Richford, in the State of New York, on July 8, 1839. His training was in accounting. Along with Samuel Andrews, inventor of the oil crude refi ning process, Rockefeller founded his fi rst company in 1862.

fi rst stage of the exploration program on the project.

According to the company, the fund-ing arrangements are well advanced and should be fi nalized shortly. The Company expects to make an announcement to the market at the appropriate time.

“Exploration Licenses have been grant-ed. Such granting of the Licenses will al-low Triton to advance the commencement of the fi rst phase of the planned explora-tion program”, Triton Managing Director Brad Boyle said.

The current Joint Venture Exploration Licenses cover approximately 920 square

kilometers, some nine (9) times the size of the land held by Syrah Resources Ltd in the Cabo Delgado Province and any addi-tional land acquired by Triton, will give the Company further access to more prospec-tive land and thus increasing the possibility of locating good graphite mineralization in the region”. (energiamocambique.co.mz)

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or [email protected] years later, on January 2, 1866, he built a second oil refi nery. With this, Rock-feller laid the groundwork for the expan-sion of the family oil business. In 1870, John D. Rockefeller founded the Standard Oil Company of Ohio, three years later, all oil refi neries in Ohio State belonged to his company.

In 1882, he formed the Standard Oil Trust. Employing methods considered il-legal in part, Rockfeller gained control of 95% of the entire U.S. oil industry. From there, he began to diversify its activities, acquiring interests in industrial and mining business. (energiamocambique.co.mz)

analysee-MAIL: [email protected] / [email protected]


Vale Vale produced produced over 90 over 90 thousand thousand seedlingsseedlingsin the coal in the coal district district of Moatize, of Moatize, TeteTete

ENVIRONMENT:

OVER 90 thousand seedlings of native species mostly from Moa-tize coal district, in Tete, have been produced by Brazilian min-ing company, Vale Mozambique, an initiative that falls under its program of Environmental Management, based on the process of revegetation and recovery of mined areas, said the statement sent to our newsroom.

Species such as Bauhinia thonigii, known locally as chitimbe or Ziziphus Abssinica, known as massan-ica or Albizia Amara, known as Ngulank-anga, are among the few that were part of a detailed survey that Vale held in 2007, having in account the impact of mining activity and on which the company com-mits to plant more trees and recover them gradually.

Maurice Simbine responsible for the project mining areas recovery ensured us that the recovery process is being carried out based on species that occur locally.

Meanwhile, about 6000 seedlings have been donated to communities, schools, lo-cal government and the general public in Moatize and Tete, with the aim of encour-

aging the planting of trees in the region, thus contributing to the preservation of Tete fl ora.

Simbine believes that “the initial assessment is positive be-cause local population have joined as well as requested seed-lings and the team has been monitoring and instructing on plant-ing and care techniques to be given to the plants.” (Newsroom: Energy-Mozambique)

9

What are the impacts of this investment? Hélder Chambisse (HC): It will have an astronomical effect, of

course. I do not recall in our country, any single investment of this scale by only two companies.

The impact is naturally positive, not only for the effect that will have on foreign investors coming to the country, but also by the injection of funds for Mozambique, the creation of necessary in-frastructure for gas exploration and job creation, although not di-rectly. Surely there will be imported skilled labor force that do not exist in Mozambique yet, but the multiplier effect that an invest-ment of this scale creates for the country is phenomenal. Now it is possible to train manpower because it can fi nd a job here. Generally, the investment will completely change the country.

But will population take real benefi ts this time? It was not the case for major investments in the past. Is it going to be different this time?

HC: I think it is a process. Mozal (aluminum smelter) was the fi rst and then Sasol (South African oil). Switching and comparing to other places in Southern Africa and Africa, Mozambique pos-sibly have not benefi ted as much as it should, especially in terms of job creation, promotion of Mozambican small and medium businesses around the megaprojects, and generating fi nancial resources for the State through taxes collecting. But it is a pro-cess and that includes learning as we go.

The Government and all structures involved, including the pri-vate sector - and this is fundamental - must gain awareness and experience and fi nd a way to benefi t from these investments. With investments of Tete, Nacala and Beira, by a need of coal transport from Tete, I believe that a positive effect is evident. I be-

Mozambique to have one of the largest gas Mozambique to have one of the largest gas liquefaction projects in the worldliquefaction projects in the world

The construction of ten plants for liquefi ed natural gas, is seemingly the largest investment ever - a mega-project only surpassed by a similar one in Qatar.

The investment to be made by North-American oil company, Anadarko Petroleum, and Italian ENI, is val-ued at 50 billion dollars. In this great interview, the Mo-zambican economist, Hélder Chambisse, talks about the impact of such a large investment in the country:

lieve that this case is different; there will be greater positive effect for the State, the private sector and the country in general.

And in your point of view, is there a danger that a USD50 billion investment may lead to an appreciation of the meti-cal?

HC: Yes, and this is already happening. The metical is strong; in 2012 the appreciation was negligible. At this time, the appre-ciation of the metical still does not match a generating capacity of foreign exchange by way of export of traditional products. The country remains a net importer. But let us say it is a challenge we have now, apart from others, to keep the metical, or maintain the conditions to promote exports and to maintain the competitive-ness of the national economy in a completely different scenario. But it is a challenge worth having.

Returning to our initial issue, which immediate effects are expected in the Mozambican economy?

HC: What we are witnessing now in Tete, Beira and Nacala is the creation of more Mozambican companies. So what I expect is that in the case of gas in the north, there will be a connection created around these megaprojects. The number of Mozambican companies that will be created around these megaprojects will be much higher when compared to those in Tete and Nacala until now. (Deutsch Welle Africa)

ted amotioth

10 Interviewe-MAIL: [email protected] / [email protected]


Law No. 14/2002 - Approves the Mines Act and repealing Law No. 2/86 April, and the Law No. 5/94 of 13 September.

ABOUT MINING TITLE OBTENTION

Article 6 6 (Requirements for mining title or authorization obtention)

1. Any person or entity, domestic or foreign can be a recon-naissance or prospecting, exploration license holder, by having legal capacity, which aims to carry out the opera-tions permitted for these bonds.

2. Any legal collective person or society can be mining con-cession holder if founded and registered in Mozambique.

3. It can be mining certifi cate holder any person, entity or corporation domiciled in the country, domestic or foreign, having legal capacity and any cooperative or family able to perform the operations authorized by this mining title.

4. It can be mining pass holder, any person, and Mozambican nationals with legal capacity that enables it to perform the operations allowed by pass mining.

5. The mining titles and permits are granted by the Ministry that oversees the mining activity in accordance with this Act and in accordance with the specifi c requirements un-der the regulations.

ABOUT MOZAMBIQUE TAX REGIME

Article 27 (Taxes due in Mining Activities)

1. People who exercise mining activity, its contractors, sub-contractors and operators are subject to taxes in force in the Republic of Mozambique, including the local authority.

2. Are specifi cally owed by the persons mentioned in the pre-ceding paragraph the following taxes:

a) The tax over production;

b) The tax over surface.

3. The Cabinet is authorized to establish the forms of taxation, tax and customs duties on mining activities, including the carrying out of prospecting, exploration and mining, chang-ing, if necessary, for this activity, the provisions of taxes on income.

SOME ESSENTIALS DETAILS REGARDING THE MINING ACT IN

FORCE IN MOZAMBIQUE

11

THE BOOM in Mozambique’s coal mining industry was driv-ing infrastructure development in the country, with the trans-port, energy and power infrastructure sectors set to experi-ence the greatest growth over the next decade, new analysis by Frost & Sullivan.

The ‘African Infrastructure Tracker: Mozambique’s Infra-structure Sectors’ report said nearly 60 multimillion-dollar ongoing infrastructure projects, of which ten were multibillion-dollar projects, would see investment of some $34-billion into the transport, energy and power, telecommunications, water and social infrastructure sectors.

Frost & Sullivan analyst Sarah O’Carroll cautioned that government’s reliance on donor funding was the single most signifi cant challenge restraining infrastructure development in the country. (adapted from miningweekly)

SOUTH AFRICA beat India and took the third position in the ranking of the largest suppliers of iron ore to China in 2012, just behind Brazil, while Australia has strengthened its domi-nant position as the main supplier of the largest consumer of the commodity in the world.

Customs data just released this month show that South Af-rica supplied 40.6 million tonnes of iron ore last year, up 12 percent compared to 2011, while Chinese imports of Indian iron ore fell by 54.74 percent to 33 million tonnes.

MOZAMBIQUE: MOZAMBIQUE:

Coal mining drives USD 34 billion Coal mining drives USD 34 billion infrastructure developmentinfrastructure development

South Africa beats India South Africa beats India on iron ore supply to Chinaon iron ore supply to China

c u r i o s i o s i t i e se-MAIL: [email protected] / [email protected]: [email protected] / [email protected]

Website: www.energiamocambique.co.mz Website: www.energiamocambique.co.mz Newsletter Newsletter nr. nr. 21 - 21 - JANUARY 28JANUARY 28thth,, 20132013

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E-magazine Energy & Extractive Industry Mozambique-edition 21- English Version